ESG Requirements

The ESG program provides funding to:

  1. Engage homeless individuals and families living on the street;
  2. Improve the number and quality of emergency shelters for homeless individuals and families;
  3. Help operate these shelters;
  4. Provide essential services to shelter residents;
  5. Rapidly re-house homeless individuals and families; and
  6. Prevent families and individuals from becoming homeless.

ESG funds may be used for five program components: street outreach, emergency shelter, homelessness prevention, rapid re-housing assistance, and HMIS; as well as administrative activities (up to 7.5% of a recipient’s allocation can be used for administrative activities).

View the ESG Fact Sheet 

Eligible Recipients

ESG is a formula grant program. Eligible recipients generally consist of metropolitan cities, urban counties, territories, and states, as defined in 24 CFR 576.2. 

Metropolitan cities, urban counties and territories may subgrant ESG funds to private nonprofit organizations.

State recipients must subgrant all of their ESG funds (except for funds for administrative costs and under certain conditions, HMIS costs) to units of general purpose local government and/or private nonprofit organizations.

All recipients must consult with the Continuum(s) of Care operating within the jurisdiction in determining how to allocate ESG funds.

Beneficiary Eligibility

The minimum eligibility criteria for ESG beneficiaries are as follows: For essential services related to street outreach, beneficiaries must meet the criteria under paragraph (1)(i) of the “homeless” definition under § 576.2.  For emergency shelter, beneficiaries must meet the “homeless” definition in 24 CFR 576.2.  For essential services related to emergency shelter, beneficiaries must be “homeless” and staying in an emergency shelter (which could include a day shelter). For homelessness prevention assistance, beneficiaries must meet the requirements described in 24 CFR 576.103par. For rapid re-housing assistance, beneficiaries must meet requirements described in 24 CFR 576.104. Further eligibility criteria may be established at the local level in accordance with 24 CFR 576.400(e).

Eligible Program Components

Street Outreach

Essential Services related to reaching out to unsheltered homeless individuals and families, connecting them with emergency shelter, housing, or critical services, and providing them with urgent, non-facility-based care. Eligible costs include engagement, case management, emergency health and mental health services, transportation, and services for special populations. See 24 CFR 576.101.

Emergency Shelter

Renovation, including major rehabilitation or conversion, of a building to serve as an emergency shelter. The emergency shelter must be owned by a government entity or private nonprofit organization. The shelter must serve homeless persons for at least 3 or 10 years, depending on the type of renovation and the value of the building. Note: Property acquisition and new construction are ineligible ESG activities.

Essential Services, including case management, child care, education services, employment assistance and job training, outpatient health services, legal services, life skills training, mental health services, substance abuse treatment services, transportation, and services for special populations.

Shelter Operations, including maintenance, rent, repair, security, fuel, equipment, insurance, utilities, food, furnishings, and supplies necessary for the operation of the emergency shelter. Where no appropriate emergency shelter is available for a homeless family or individual, eligible costs may also include a hotel or motel voucher for that family or individual.

See 24 CFR 576.102.

Homelessness Prevention

Housing relocation and stabilization services and short-and/or medium-term rental assistance as necessary to prevent the individual or family from moving to an emergency shelter, a place not meant for human habitation, or another place described in paragraph (1) of the homeless definition.

The costs of homelessness prevention are only eligible to the extent that the assistance is necessary to help the program participant regain stability in their current housing or move into other permanent housing and achieve stability in that housing.

Eligible costs include:

  • Rental Assistance: rental assistance and rental arrears
  • Financial assistance: rental application fees, security and utility deposits, utility payments, last month's rent, moving costs
  • Services: housing search and placement, housing stability case management, landlord-tenant mediation, tenant legal services, credit repair

See 24 CFR 576.103.

Rapid Re-Housing

Housing relocation and stabilization services and/or short-and/or medium-term rental assistance as necessary to help individuals or families living in shelters or in places not meant for human habitation move as quickly as possible into permanent housing and achieve stability in that housing.

Eligible costs include:

  • Rental Assistance: rental assistance and rental arrears
  • Financial Assistance: rental application fees, security and utility deposits, utility payments, last month's rent, moving costs
  • Services: housing search and placement, housing stability case management, landlord-tenant mediation, tenant legal services, credit repair

See 24 CFR 576.104

Data Collection (HMIS)

ESG funds may be used to pay for the costs of participating in and contributing to the HMIS designated by the Continuum of Care for the area. More information about using an HMIS is available on the HMIS page.

See 24 CFR 576.107

Administration

Up to 7.5 percent of a recipient's allocation can be used for Administrative activities. These include general management, oversight, and coordination; reporting on the program; the costs of providing training on ESG requirements and attending HUD-sponsored ESG trainings; the costs of preparing and amending the ESG and homelessness-related sections of the Consolidated Plan, Annual Action Plan, and CAPER; and the costs of carrying out environmental review responsibilities.

State recipients must share administrative funds with their subrecipients that are local governments, and may share administrative funds with their subrecipients that are nonprofit organizations.